Post by Trade Coach on Feb 26, 2017 16:58:15 GMT 1
Nigerians Views on the implementation of a Common External Tariff For the Economic Community of West African States
For West and Central African states, the journey to economic integration in the region began in the year 2015. After years of planning, the Common External Tariff (CEO has finally taken off. For many Africans from the ECOWAS region, the common tariff is like what obtains in other advanced countries, particularly in Europe, where economic measures have been introduced to strengthen trade and cooperation among the member nations. The ECOWAS common tariff which Nigeria implemented April 11, 2015 has been an improvement to the ECOWAS Trade Liberalization Scheme introduced years back that was targeted at promoting trade within the sub-region. Nigeria commenced its implementation few months after the deadline by other nations within the sub-region. The body had chosen January 2014 for the take-off for every member state. Nigeria however came late apparently because of the election which forced the ruling government to suspend some policy matters to avoid negative implication in the poll.
Ecowas Cet
The then Deputy Controller of Customs and Head of Public Relations in the Nigeria Customs Service (NCS) Alhaji Wale Adeniyi, had announced the implementation of the ECOWS CET together with its Supplementary Pit4ection Measures (SPM) to take effect April 11. This was after the expiration of the 30 days notice required under the provisions of the ECOWAS CEF. Adeniyi said that with the policy all imports arriving into the country beginning from about mid April, 2015 shall be subjected to the rates contained in the CET 2015- 2019 and 2015 Fiscal Measures without recourse to the rates applicable before the coming into effect of the ECOWAS CET 2015 - 2019. He also hinted that the approved Supplementary Protection Measures (SPM)/Fiscal Policy Measures comprise an import Adjustment Tax (IAT) list which involves additional taxes on 177 Tariff fines of the ECOWAS CET. This according to him also includes a National List consisting of items whose import duty rates have been reviewed to encourage more development in strategic sectors of the economy and an Import Prohibition List (Trade), applicable only to certain goods originating from non-ECOWAS Countries. With a directive from the former Finance Minister, Dr. Mrs.Ngozi OkonjoIweala, the Customs Service had in turn directed immediate enforcement of the tariff provisions by all Customs Controllers. The statement had urged all stakeholders to ensure compliance with the New ECOWAS Tariff to enhance trade facilitation within and outside the region. Although the take-off was April 11, investigations showed that the various Commands of the Customs complied months after the directive.
Benefits and Challenges
To stakeholders, the expression about the implementation of the CEF is that of optimism that it would promote trade in the African sub-region to the benefit of Nigerian companies. Besides, the policy is seen as one that will usher in transparency in the process of international trade. Perhaps what is so clear is that it will surely check smuggling, a situation that will equally mean more revenue for the Customs Service. But this is too early to conclude since the emerging harmonized tariff is not dear as to whether revenue will go up here in Nigeria or go down. Depending on the tariff structure, it is envisaged that the new policy is capable of bringing down prices of goods in the market, a development that has brought about excitement among many Nigerians on learning about the uniform tariff regime.
For Prince Olayiwola Shittu, “such expectation could become real with the insistence on proper procedure and the competitiveness of the ports” Shittu however argued that it would be wishful thinking to believe every item in the market would be cheap because of the new policy He said, “Definitely, it will stop smuggling create competition among nations and attract more vessels to Nigeria because there will be no more diversion of cargoes. If what you are going to pay in Ghana or Ivory Coast is the same thing you are going to pay in Nigeria, why take your goods there? It will encourage the development of inter-states trade and this will be to ECOWAS what EU is to Europe, that is regional integration”. Applauding the new policy, President of the National Council of Managing Directors of Customs Agents (NCMDCA), Mr Lucky Antiwero, said this will be a big task for the customs service. Antiwero optined that the new policy was such that the Customs Service should be ready to work hard to put structures in place for the implementation. He added that except the Customs does a good job in its implementation, Nigeria will not benefit According to him, it is now all about competition, and Nigeria has to truly facilitate trade in terms of the length of time it takes in clearing the goods in the ports. He also identified other unofficial costs of clearing the goods, adding that the government must ensure that this is checked so that importers would have no reason to prefer the neighboring ports. To Amiwero, poor implementation may affect Nigeria as importers will continue to divert goods meant for the country He called on the management of the Customs to ensure that experts in the systems were engaged 10 work out what is needed for a smooth implementation of the policy in the country.
Experts believe that the CET will lead to increase in turnover with larger domestic market within the sub-region. This is expected to lead to higher growth as a result of increased intra-regional trade and foreign direct investment.
However, there are also other disadvantages to CET. To experts, this could be by way of loss of national trade policy for each country and not just Nigeria. With the policy Nigerian manufacturers may be handicapped to ask for cut in tariff or other duty exemptions for whatever reason has been the case. Besides, it is being argued that low level tariff could lead to dumping of products and indeed negative effect on revenue for government.
And with poor infrastructure, including unreliable nature of power provision in the country compared to the robust nature in other countries, manufacturers in Nigeria may be hit by the CET implementation.
For West and Central African states, the journey to economic integration in the region began in the year 2015. After years of planning, the Common External Tariff (CEO has finally taken off. For many Africans from the ECOWAS region, the common tariff is like what obtains in other advanced countries, particularly in Europe, where economic measures have been introduced to strengthen trade and cooperation among the member nations. The ECOWAS common tariff which Nigeria implemented April 11, 2015 has been an improvement to the ECOWAS Trade Liberalization Scheme introduced years back that was targeted at promoting trade within the sub-region. Nigeria commenced its implementation few months after the deadline by other nations within the sub-region. The body had chosen January 2014 for the take-off for every member state. Nigeria however came late apparently because of the election which forced the ruling government to suspend some policy matters to avoid negative implication in the poll.
Ecowas Cet
The then Deputy Controller of Customs and Head of Public Relations in the Nigeria Customs Service (NCS) Alhaji Wale Adeniyi, had announced the implementation of the ECOWS CET together with its Supplementary Pit4ection Measures (SPM) to take effect April 11. This was after the expiration of the 30 days notice required under the provisions of the ECOWAS CEF. Adeniyi said that with the policy all imports arriving into the country beginning from about mid April, 2015 shall be subjected to the rates contained in the CET 2015- 2019 and 2015 Fiscal Measures without recourse to the rates applicable before the coming into effect of the ECOWAS CET 2015 - 2019. He also hinted that the approved Supplementary Protection Measures (SPM)/Fiscal Policy Measures comprise an import Adjustment Tax (IAT) list which involves additional taxes on 177 Tariff fines of the ECOWAS CET. This according to him also includes a National List consisting of items whose import duty rates have been reviewed to encourage more development in strategic sectors of the economy and an Import Prohibition List (Trade), applicable only to certain goods originating from non-ECOWAS Countries. With a directive from the former Finance Minister, Dr. Mrs.Ngozi OkonjoIweala, the Customs Service had in turn directed immediate enforcement of the tariff provisions by all Customs Controllers. The statement had urged all stakeholders to ensure compliance with the New ECOWAS Tariff to enhance trade facilitation within and outside the region. Although the take-off was April 11, investigations showed that the various Commands of the Customs complied months after the directive.
Benefits and Challenges
To stakeholders, the expression about the implementation of the CEF is that of optimism that it would promote trade in the African sub-region to the benefit of Nigerian companies. Besides, the policy is seen as one that will usher in transparency in the process of international trade. Perhaps what is so clear is that it will surely check smuggling, a situation that will equally mean more revenue for the Customs Service. But this is too early to conclude since the emerging harmonized tariff is not dear as to whether revenue will go up here in Nigeria or go down. Depending on the tariff structure, it is envisaged that the new policy is capable of bringing down prices of goods in the market, a development that has brought about excitement among many Nigerians on learning about the uniform tariff regime.
For Prince Olayiwola Shittu, “such expectation could become real with the insistence on proper procedure and the competitiveness of the ports” Shittu however argued that it would be wishful thinking to believe every item in the market would be cheap because of the new policy He said, “Definitely, it will stop smuggling create competition among nations and attract more vessels to Nigeria because there will be no more diversion of cargoes. If what you are going to pay in Ghana or Ivory Coast is the same thing you are going to pay in Nigeria, why take your goods there? It will encourage the development of inter-states trade and this will be to ECOWAS what EU is to Europe, that is regional integration”. Applauding the new policy, President of the National Council of Managing Directors of Customs Agents (NCMDCA), Mr Lucky Antiwero, said this will be a big task for the customs service. Antiwero optined that the new policy was such that the Customs Service should be ready to work hard to put structures in place for the implementation. He added that except the Customs does a good job in its implementation, Nigeria will not benefit According to him, it is now all about competition, and Nigeria has to truly facilitate trade in terms of the length of time it takes in clearing the goods in the ports. He also identified other unofficial costs of clearing the goods, adding that the government must ensure that this is checked so that importers would have no reason to prefer the neighboring ports. To Amiwero, poor implementation may affect Nigeria as importers will continue to divert goods meant for the country He called on the management of the Customs to ensure that experts in the systems were engaged 10 work out what is needed for a smooth implementation of the policy in the country.
Experts believe that the CET will lead to increase in turnover with larger domestic market within the sub-region. This is expected to lead to higher growth as a result of increased intra-regional trade and foreign direct investment.
However, there are also other disadvantages to CET. To experts, this could be by way of loss of national trade policy for each country and not just Nigeria. With the policy Nigerian manufacturers may be handicapped to ask for cut in tariff or other duty exemptions for whatever reason has been the case. Besides, it is being argued that low level tariff could lead to dumping of products and indeed negative effect on revenue for government.
And with poor infrastructure, including unreliable nature of power provision in the country compared to the robust nature in other countries, manufacturers in Nigeria may be hit by the CET implementation.